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Limits on the quantity of gold kept in the house have IT Exemption
Posted on: 07/Sep/2019 3:59:57 PM
A frequently thought question is how much quantity of gold can be kept in the house. Tax experts observe there is no necessity for any worry as long as the source for the gold could be explained clearly!
In its press release dated 01 December 2016, CBDT (Central Board of Direct Taxes) had clarified that there is no limit on holding of gold jewellery or ornaments by anybody provided he/she is able to explain the source of such investment.
However, please note that in case any search is conducted for the taxpayer, the tax officials can confiscate the gold and/or jewellery if it is found that the investment is not in line with the income level of the assessee as reported in his past tax returns.
It has further been clarified that the jewellery and ornaments will not be seized if the quantity is below the allowed limits. This is so even if prima facie it seems to be disproportionate with the income records of the assessee:
- 500 grams for married lady
- 250 grams for unmarried lady
- 100 grams for a male member
Please note that the officer conducting a search has discretion not to seize an even higher quantity of gold jewellery based on factors, including family customs and traditions.
Hence, it is quite clear that if the investment in gold or jewellery is in line with the income of the taxpayer and/or the taxpayer is able to explain the source of that investment/inheritance, there are no reasons to worry.
Proofs required
- The tax invoice issued by a jeweller is the best proof of your investment in gold.
- In the case of inheritance or gift, proof such as receipt in the name of the original owner, family settlement deed, Will, gift deed, etc.
In the absence to show any such documents, the officer will try to match it based on factors such as family social status, customs, traditions, etc., but then it goes to the discretion of the tax officer.
Precautions
- Please note that the limits stated above for search and seizure are for individual taxpayers.
- In case there is a single locker in which gold is deposited the gold belonging to different family members, then the limit will be enhanced to the total of the limits for each individual taxpayer. In this case, however, it is advisable to have the locker in joint names to avoid any complication.
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